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Bad behavior and the impact upon the finances in divorce

In these columns we have regularly referred to the factors that the court has to take into account when deciding the financial arrangements that should apply when spouses and civil partners separate and divorce. It may be helpful to recap briefly.

Factors that the court will consider

The starting point is not drawn specifically from legislation, but from many cases decided by the courts, taking account of the statutory considerations.

In the overwhelming majority of cases, having decided what the financial resources of the parties are, the starting point will be that those finances should be divided equally. The court will then consider whether there are any good reasons why equal division of the resources should not take place.

In making that decision, the judge will take into account the statutory criteria set out in s. 25 Matrimonial Causes Act 1973. Briefly put, those criteria are:-

The financial position of each party, being as it is at the time of the court hearing and as it is likely to be in the future

The current financial needs of each party and what they are likely to be in the future

The standard of living which the parties have enjoyed

The age of each party and the length of the marriage

Any relevant physical or mental disabilities

The respective contributions made by each party to the welfare of the family

The conduct of each party if it would be inequitable to disregard it.

Any benefit which a party will lose as a result of the divorce.

The weight to be attached to each of the above considerations

In law, the judge is required to consider each factor. At the outset, no one factor has more significance that any of the others. However, as a case progresses it very often becomes apparent that one is of such importance that it has to be given priority.

A good example of this is the question of the needs of the parties. Whatever may be the strength of other factors, the court must find a solution that best copes with the realistic requirements of each party to live in the aftermath of the separation and divorce.

However, just sometimes, one of the other factors is of such compelling strength and importance, that it can be of greater significance even than “needs”. “Conduct” is one such example and it is that factor that will be examined in this piece.

The significance of bad conduct

As set out above, the law is that conduct will be taken into account if it really would be inequitable to ignore it. That, of course, raises the question of what conduct would be such that it cannot be ignored.

In a recent case, it was said that “conduct” would have to be such as to produce a “gasp” (of horror or disbelief) before it would make a difference. In other words, it would have to be conduct that really was so unacceptable, deliberate and perverse that it was relevant it take it into account.

There have been cases in the last decade or so where the following have been found to be conduct which is relevant in arriving at a decision in the proceedings:

serious physical assault

attempted murder

dissipation of assets through gambling

serious failures to disclose the existence of assets

A possible new slant on the significance of conduct from a case in 2015

In a case which was decided in 2015, a High Court Judge took a novel and unprecedented approach to bad conduct by a husband, conduct which was admitted by him.

In this particular case, which involved large sums of money, the judge found that the husband, who had obsessive characteristics, had spent a very considerable amount on:

his addiction to drugs,

the use of prostitutes, and

the restoration of properties to a disproportionate extent of detail.

He had also paid very large sums in treatment for these conditions.

In the financial proceedings, the wife argued that it would be unfair on her to have to suffer financially from this spending by her former husband. She said that that expenditure by him, or at least a part of it, should be treated as money which he had received in the divorce settlement and that she should be credited with the same amount before there was a distribution of the balance.

In his judgment, the Judge gave a detailed examination of the background to the case and to the husband’s behaviour. The Judge said:-

“I do not find that the husband overspent to reduce the wife’s claim. In part he did it because he could not prevent himself from doing it. It was down to his flawed character. ...Partly, the husband was trying, in his own way, to put matters right……..The husband was ill and he needed treatment. The same illness prevented him at times from accepting the treatment”.

The Judge then concluded and this is the very important part of this case:-

“A spouse must take his or her partner as he or she finds them. Many successful people are flawed. This true of this husband…...It would be wrong to allow the wife to take advantage of the husband’s great abilities that enabled him to make such a success of the company while not taking the financial hit from his personality flaw that led to is addiction and his inability to rid himself of his habits. I find that the husband did not act in a wanton or deliberate way in the dissipation of assets”.

Conclusion

It is clear from this case that in the future, it will be necessary to prove that a party who has behaved badly, has done so deliberately, knowingly, and with the intention of inflicting harm, physical, emotional or financial on his or her spouse; before that conduct will be regarded as relevant.

It is equally clear that every case will depend on the details and that judges retain a wide degree of discretion in how particular features in the background should be treated in arriving at what is regarded as a fair conclusion.

The whole question of that degree of judicial discretion is a topic to which we shall return in a future article.